Connect and Catalyse: A strategy for business innovation 2008-2011 pdf

Connect and Catalyse
A strategy for business innovation
2008-2011
Our vision: for the UK to be a global leader
in innovation and a magnet for innovative
businesses, where technology is applied
rapidly, effectively and sustainably to create
wealth and enhance quality of life
12 Thinking and acting globally
13 Connecting innovation
14 How we will make investments
14 Knowledge Transfer Networks
14 Knowledge Transfer Partnerships
14 Sandpits
14 Feasibility studies
15 Exploratory awards
15 Proof of concept
15 Collaborative Research
and Development
15 Large projects and demonstrators
15 Centres
15 Standards, regulation and
measurement
Contents
A strategy for business innovation
|
2008-2011
Contents
|
01
16 Our customers and partners

16 Working with business
16 Working with the knowledge base
16 Working with government
17 Government departments
17 Devolved administrations and
regional development agencies
17 Research councils
18 Measuring success
18 UK innovation trends
18 Measuring our impact
19 In conclusion
20 Glossary
The Technology Strategy Board is an
executive non-departmental public
body sponsored by the Department for
Innovation, Universities and Skills (DIUS).
For more information, visit:
www.innovateuk.org
Technology Strategy Board
B1, North Star House
North Star Avenue
Swindon
SN2 1JF
Tel: 01793 442700
Email:
03 Executive summary
04 Our world
05 Our objectives
05 What this means for business
06 Our investment strategy

06 Budget
06 Investment criteria
07 Challenge-led innovation
07 Commitments
07 Key application areas
07 What this means for business
08 Innovation Platforms
08 Challenge competitions
08 Delivering innovation
through procurement
09 Technology-inspired innovation
09 Commitments
09 Key technology areas
09 What this means for business
09 Emerging technologies and industries
10 The innovation climate
10 Commitments
10 Knowledge exchange
11 Networks
11 Clusters
The Technology Strategy Board has
already come a long way. We inherited
from government a strong foundation
of successful programmes promoting
innovation, on which to build. Now, we
have new vision and ambition. We want to
make the UK a global leader in innovation.
That is our destination; this strategic plan
is our roadmap for the coming few years.
The journey will involve experimentation and

discovery; success and disappointment;
challenge and solution; risk and reward.
Innovation, the successful exploitation of
new ideas, underpins economic growth.
Our job is to ensure that the UK is in
the forefront of innovation enabled by
technology. To achieve this, we will help
businesses on their journeys of discovery.
How?
• By providing strategic innovation
leadership and investment
• By bringing people together in
partnership and working across
business, government and the
research community
• By ensuring that the UK has the
necessary capability in key technologies
• By taking a global perspective
• By investing in networks and
knowledge exchange
• By promoting the importance of
innovation and technology.
We are building on Lord Sainsbury’s
review ‘The Race to the Top’, the DIUS
white paper ‘Innovation Nation’ and the
BERR strategy document ‘Enterprise:
Unlocking the UK’s Talent’. And we take
into account leading reports from bodies
such as the Commission on Environmental
Markets and Economic Performance.

02
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Introduction
A strategy for business innovation
|
2008-2011
We have listened to many businesses
and partner organisations about what
is needed; thank you for all your input.
Informed by all we have heard, we believe
that we need to connect and to catalyse.
And in doing so we are focusing on three
specific areas: innovation in response
to societal and economic challenges;
innovation inspired by the existing and
emerging technologies where the UK
leads or could lead; and the ‘climate’ or
culture in which innovation can grow.
These themes are at the core of the
strategy outlined in this document. It’s an
exciting, important journey which we are all
making together, and it begins now.
Iain Gray
Chief Executive
Technology Strategy Board
May 2008
We aim to make the UK a global leader in
innovation. This strategic plan outlines
how we will promote and invest in
innovation enabled by technology for

the benefit of business, to increase
sustainable economic growth and to
improve quality of life.
We will provide leadership to invest in
new ideas, build networks, and promote
knowledge exchange.
We will act as a catalyst to stimulate new
areas of activity for business and provide a
longer-term view of future technology and
innovation needs across the UK economy
and globally.
Working with the regional development
agencies and the research councils, we
will jointly invest over £1 billion in the next
three years. Our proven ability to obtain
matching private sector investment will
at least double that to over £2 billion. In
addition, we will continue to work with
government departments, the devolved
administrations and other funding partners
to increase the overall total.
With a wide remit covering the whole of the
UK economy, we will have to make choices.
This document sets out our priorities.
We plan to invest according to three
main strategic themes: innovation led
by challenges; innovation inspired by
technology; and the innovation climate.
We aim for our annual investment to be
targeted in these areas, in a ratio of 50%,

25% and 25% respectively by 2011.
Over the next three years we will:
• Increase our focus on challenge-led
innovation and helping business find
opportunities in societal challenges
such as climate change and the
ageing population
• Double the number of Innovation
Platforms, which take a new cross-
cutting approach to these challenges
• Develop strategies in key market
application areas representing major
societal or economic challenges to
the UK
• Understand, strengthen and invest
in the UK’s capabilities in core,
underpinning technologies
• Develop and implement a strategy to
promote the rapid commercialisation of
emerging technologies and industries
• Carry out a strategic review of the
Knowledge Transfer Networks and
reinforce and extend their role
• Double the number of Knowledge
Transfer Partnerships and increase
their flexibility
• Pilot a reformed Small Business
Research Initiative
• Work to maximise the positive impact of
government procurement on innovation

• Think and act globally.
A message we consistently get from
business is to keep it simple. With
our focus on innovation enabled by
technology, we will:
• Understand the support required by
business and provide a coherent
view of what is available, from us
and from others
• Ensure that our support is exible and
meets the needs of business
• Simplify and streamline our delivery
• Invest in some areas with a higher level
of risk, as part of a balanced portfolio
• Evaluate our investments to keep
them effective
• Work with partners to make businesses
in the UK more open to innovation and
share with them the credit for what we
all achieve.
‘Business as usual’ will not achieve
our vision for innovation in the UK.
We plan to stimulate a debate about
the appropriate scale of ambition and
how to measure progress.
This strategic plan is the beginning of
a long-term programme of action. The
rewards are potentially far-reaching. The
Technology Strategy Board welcomes the
challenge. We are confident in the UK’s

ability to deliver.
Executive Summary
|
03
NoveLELS is a collaborative project led by Enfis Ltd, which is establishing the techniques needed for the
commercial production of solid-state lighting units. These innovative technologies will deliver energy efficient
environmentally friendly, long lifetime lighting with wide applications in the aerospace and computer industries and
beyond. 50% of the project cost is Technology Strategy Board investment.
Executive Summary
The world is changing rapidly. Climate
change, globalisation, the ageing
population and worries over security pose
major societal challenges for us all.
Businesses face additional challenges,
including rising energy and raw material
costs, growing competition, the search for
talent and skills, ever more sophisticated
consumers, and a perpetual revolution in
business models and methods.
But where there are challenges, there
are opportunities. The businesses most
likely to succeed are those which see
the challenges most clearly, embrace
innovative ideas and adopt cutting-edge
technologies – in a climate of confidence,
aspiration and intellectual enquiry. The
task of the Technology Strategy Board is to
help them succeed.
Our vision is for the UK to be is a
global leader in innovation and a

magnet for innovative businesses,
where technology is applied rapidly,
effectively and sustainably to create
wealth and enhance quality of life.
Innovation takes many forms and has
many drivers. For the UK to achieve its full
potential, we need to focus on:
Challenge-led innovation
Treating the societal and economic
challenges of the future not just as
threats, but as opportunities for innovative
solutions that enhance quality of life and
increase wealth
Technology-inspired innovation
Maintaining core expertise and leading
edge technologies to underpin UK
business growth and to invest in the next
generation of technologies and industries
The innovation climate
Fostering a national confidence in the
power of innovation to create opportunities
and raise sustainable economic growth,
and a commitment to making that happen.
Our task at the Technology Strategy
Board is to connect and catalyse. As an
organisation we work for business – our
customers – and in partnership with
government and the research and financial
communities. We will embody innovation
in our business practices and we will

not be afraid to take risks and challenge
received wisdom.
A strategy for business innovation
|
2008-2011
04
|
Our world
Our world
A collaborative research and development project
led by Wireless Fibre Systems Ltd is developing
innovative underwater telecommunications devices
using advanced radio technology. The picture shows
early trials of an underwater broadband data link at
Deep Sea World, with resident shark looking on.
We will:
Promote a culture of confidence
in and enthusiasm for innovation.
• Provide innovation and technology
leadership to our partners, including
government departments and agencies,
regional development agencies,
devolved administrations, research
councils and others
• Celebrate the UK’s innovation
success stories
• Increase the appetite for technology
and innovation
• Foster multidisciplinary collaboration
and connections

• Encourage co-ordination between
businesses, and between business and
partners, to overcome fragmentation in
the innovation ‘ecosystem’.
Invest to help innovative businesses
become and remain successful in the
global marketplace.
• Encourage business investment in
technology and innovation to increase
sustainable economic growth and
improve quality of life
• Invest to stimulate the emerging
technologies and industries of tomorrow.
Understand and communicate
the drivers of innovation.
• Understand markets – and why some
businesses are better at innovation
than others
• Provide insight into the process of
turning innovation into wealth.
Collaborate with business and our
partners to stimulate innovation.
• Work with businesses, the nancial
community and government and other
expert bodies to understand how best
to stimulate innovation
• Advise government on barriers
to innovation and the exploitation
of technologies, and make
recommendations for removing

these barriers
• Align innovation support mechanisms
and contributions from partners with
our own strategic activities, delivering
stronger and more aligned support
for business.
Be a high-performance innovative
organisation that gets things done.
• Be a great place to work, able to attract
the highest quality people and invest in
their development.
What this means for business
We will help maintain the competitive
position of our world-leading businesses
and sectors against global competition.
This includes areas of manufacturing such
as biosciences and aerospace, as well
as high-value services including financial
services and the creative industries.
We will identify and grow sectors and
businesses with the capacity to be among
the best in the world. We will encourage
them to fulfil their potential.
We will help to turn today’s emerging
markets and new technologies into the
growth sectors of tomorrow. We will use
our investments to reduce the time it takes
to bring new products to market.
Our objectives
|

05
Treating the societal and economic
challenges of the future not just as threats,
but as opportunities for innovative
solutions that increase economic
growth and enhance quality of life
Our objectives
We will invest to generate sustainable
economic growth and improve quality
of life. We will join up the fragmented
technology and innovation landscape in
the UK, including international links.
We are open to working with businesses
in any part of the economy and we are
particularly committed to encouraging
knowledge transfer between sectors. But
we will not provide support indiscriminately
and we will not spread our resources too
thinly. We will focus on those areas of the
economy where the UK has strength and
which will provide the greatest impact.
Budget
Our budget for 2008-2011 is £711 million,
plus aligned funding from the regional
development agencies of £180 million
and at least £120 million from the
Research Councils.
With related funding from government
departments and the devolved
administrations, this will bring investment

by ourselves and our partners to well over
£1 billion over the next three years. This
is a substantial level of resource, and a
testament to the progress that we have
already made in sharpening support for
innovation enabled by technology in
the UK.
06
|
Our investment strategy
Our investment strategy
A strategy for business innovation
|
2008-2011
Does the UK have the capability?
• Do we have the capacity and capability and skillbase in the UK to research, develop and exploit
the technology or innovation?
• Do we have - or can we build - a strategic presence or a UK centre of gravity in this area?
Is there a large market opportunity?
Is the idea “ready”?
Can the Technology Strategy Board make a difference?
• What is the size of the global market opportunity?
• Will it create added value in the UK, taking account of the global market potential?
• Will innovation in one company or sector transfer to others, boosting the overall returns?
• Is there a clear opportunity to which this is a timely response?
• Is the science or the creative application of technology developed far enough to underpin
the innovation?
• Will bringing it to market make enough impact quickly enough to be commercially rewarding?
• Will it speed progress towards more sustainable economic growth?
• Is there a clear Technology Strategy Board role? Can we add value?

• Will our investment promote sustainability and quality of life?
• Can we bring partners or programmes together to create more than the sum of the parts – for
example in cross-government co-ordination?
• Will our involvement limit or spread risk, or enhance opportunities? Are there gaps that we can
bridge? Can we create challenges to which others will respond? Can we address barriers to
progress? Can we inspire a culture of innovation?
Investment Criteria
Yet the scale of the challenge facing the UK
should not be underestimated. Innovation
is seldom cheap. Our biggest impact has
to come through our work as catalyst and
connector, rather than through the simple
distribution of funds. Fortunately, our track
record of success in leveraging both public
and private sector funds means we are
confident that the total impact of our work
will be investment in innovation of well
beyond £2 billion over the same period.
Investment criteria
We will have to make choices as to
where we invest. We will do so using
the following criteria:
• Does the UK have the capability?
• Is there a large market opportunity?
• Is the idea ready?
• Can the Technology Strategy Board
make a difference?
We will make informed decisions on
where we invest and evaluate
performance. We will be willing to stop

investments that are not performing.
We will use a range of mechanisms to
foster innovative responses to challenges
Challenge-led innovation
|
07
Challenge-led innovation
To unleash the UK’s full innovation
potential we need to change many of
the ways in which we all think. It would
be easy to feel overwhelmed by the
many challenges that the world faces,
such as climate change, the ageing
population, globalisation and
security threats.
But the very things that seem to
threaten us can be used to stimulate
responses that enhance the quality
of life and increase wealth. The
Technology Strategy Board will use
a range of mechanisms, levers and
initiatives to foster innovative responses
to challenges.
In doing so, our role will be to connect
and catalyse – and then let the market
select the best solutions.
What this means for business
We will identify challenges, establish
priorities in each of these key application
areas and develop strategies which

specify the key interventions. We will put
into place appropriate responses, aimed
at generating an innovation answer to the
key challenges. In doing this, we will listen
to the voices of others including business,
Innovation and Growth Teams, Knowledge
Transfer Networks and government
departments including the sector teams in
the Department for Business, Enterprise
and Regulatory Reform (BERR).
Major challenges break down into
subsidiary challenges. Examples of these
and the possible responses include:
• Promoting UK strengths in low carbon
energy generation and oil and gas
extraction, by investment in energy
generation and supply technologies,
including our investment through the
Energy Technologies Institute
• Investing to maintain the leading
position of the UK’s pharmaceutical
and healthcare sectors
• Promoting the competitiveness of the
UK aerospace sector, by investment in
alignment with the National Aerospace
Technology Strategy and the UK Civil
Space Strategy
• Improving the resource efciency of UK
business by minimising pollution and
waste, and increasing energy efficiency

• Addressing the challenges facing the
creative industries arising from the rapid
pace of change in digital technology,
developing and implementing
appropriate responses
• Evaluating and prioritising opportunities
for the innovative use of technology in
other high-value service sectors and
acting accordingly.
2010-112008-09
Changing proportions of
Technology Strategy Board financial
investment over 3-year period
Te chnology-inspired innovation
Challenge-led innovation
The innovation climate
Commitments
We will increase our investment
in challenge-led innovation activities
to approximately 50 percent of
our budget.
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main areas where we plan to invest,
taking international perspectives
into account.
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Innovation Platforms responding to
societal challenges to 10 and invest
up to £100 million annually in them.
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including investing up to £20 million
annually in the Energy Technologies
Institute.
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procurement by working closely
with government departments
and agencies.
Key application areas
We are developing strategies in a
number of broad areas representing
major societal challenges or associated
with the challenge of maintaining
a world-leading position. Currently,
they include:
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Innovation Platforms
Innovation Platforms are one of the
principal ways in which we support
challenge-led innovation. An Innovation
Platform is a new approach to delivering
innovation which targets one of today’s
major policy, societal or market challenges.
It means understanding the role of
government regulation and procurement in

changing markets, working with business
and research organisations to identify
their response to these changes, and
then supporting programmes to deliver
innovative solutions.
Innovation Platforms embody our
principles of ‘connect and catalyse’ and
we expect them to:
• Bring together businesses which already
participate in these markets with those
who would not normally do so – and the
government departments which control
policy, regulation and procurement in
these areas
• Adopt a multi-disciplinary approach
which fosters all types of innovation,
bringing together public and private
funding where the two can usefully
reinforce one another
• Make something happen that would not
otherwise happen, and above all lead to
commercial benefit and a change
in behaviour.
We are currently investing, along with
business partners and a number of public
sector organisations, in five Innovation
Platforms. These focus on assisted living,
intelligent transport systems and services,
low carbon vehicles, low impact buildings
and network security. They are charged

with promoting challenge-led innovation
within their respective areas.
For example:
• Climate change is perhaps the greatest
challenge we face. At least part of the
response is likely to involve accelerating
the introduction of low carbon vehicles,
which the Low Carbon Vehicles
Innovation Platform will address.
• Another challenge relating to climate
change is the energy efficiency and
environmental footprint of buildings.
The Low Impact Buildings Innovation
Platform addresses this.
• Meeting the demand for independent
living for the elderly and the chronically
ill is a challenge already identified, which
the Assisted Living Innovation Platform
will seek to address.
• Achieving greater security of electronic
networks is another large societal
challenge. The Network Security
Innovation Platform will address this.
• The Intelligent Transport Systems and
Services Innovation Platform will work
to improve transport efficiency and
reduce congestion.
Over the next three years, we will
introduce a further five Innovation
Platforms in areas which address other

major societal challenges.
Challenge competitions
We will pilot competitions where we set
the challenge, with both business and
government, and allow the market to
provide the solution. Such competitions
will encourage a multidisciplinary
response, bringing together organisations
which might not normally work together to
create new and exciting solutions. They will
also provide a way of testing feasibility of
future Innovation Platforms.
Delivering innovation
through procurement
UK government procurement currently
runs at around £150 billion each year,
much of which addresses societal
challenges, directly or indirectly. If we can
increase the proportion that specifically
aims to stimulate innovative responses,
rather than ‘business as usual’ activities,
then there will be a direct impact on the
UK’s overall innovation rate. And if large
market opportunities arise from that, then
the overall impact could be enormous.
We will work with government departments
and the Office of Government Commerce
to help identify future procurement
opportunities with the potential to stimulate
innovation. An initiative in this area may

be particularly valuable for small and
medium sized businesses. They tell us
that a government contract is often better
for them than a grant, making it easier for
them to attract investment and grow.
We will act on the recommendation in
the Sainsbury Review and put forward
a proposal for encouraging innovation
in small business through government
procurement of research. We will work with
the Department for Innovation, University
and Skills (DIUS) to pilot a reformed
Small Business Research Initiative
(SBRI) with the Ministry of Defence and
the Department of Health, prior to wider
deployment from April 2009.
08
|
Challenge-led innovation
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A strategy for business innovation
|
2008-2011
The Code for Sustainable Homes shows how government, taking a long term view, can stimulate innovation, create
new markets and deliver policy objectives. This national design and construction standard requires all new homes
to be zero carbon by 2016, giving business clarity and an incentive to invest in innovative approaches. Our Low
Impact Buildings Innovation Platform is bringing business and government together to focus on this area.
BRE Innovation Park.
Maintaining core expertise and investing
in the next generation of technologies

and industries
Technology-inspired innovation
|
09
In the race to innovate, the UK has a
stock of assets that few nations can
match. Our best universities, and the
wider research base in both the public
and the private sector, have few rivals.
Our track record for innovation is
already among the best in the world.

beating, and can be used to inspire
new waves of innovation to carry the
economy and society forward in the
twenty-first century. We are building on
strong foundations.
It is vital that the UK maintains core
expertise in leading edge technologies
to underpin UK business growth. It is
no less vital to maintain a pipeline of
new advances to keep UK businesses
at the leading edge. The venture capital
industry has contributed significantly
in this regard, as has our financial
system generally.
The Technology Strategy Board
will seek to build on this, investing
in areas where the UK is strong, to
provide capability, taking account of

the recommendations of business
groups such as the Confederation of
British Industry and bodies such as the
Council for Science and Technology.
We will identify emerging technologies
that could have a major disruptive
impact or the potential to create
new industries.
Commitments
We will invest approximately 25 percent
of our budget in core technologies that
are critical to the UK’s success.
• Invest in UK strengths in control
systems and power engineering, plastic
electronics, displays and lighting, data
and image acquisition, integration and
interoperability, and communications
• Use the UK’s electronics and photonics
expertise in system level design and
embedded systems to exploit end-use
applications
• Invest in the development and
exploitation of component technologies
and end-to-end ICT systems that
are rapidly configurable, informed,
intelligent, dependable and user-centric
• Promote a high value approach to
manufacturing by investing in product
and process technology and by
encouraging service innovation and

business model innovation to increase
UK manufacturing competitiveness
• Invest in modelling and engineering of
complex systems across sectors
• Invest in the development and exploitation
of second and third generation bio-fuels.
Emerging technologies and industries
The Technology Strategy Board will seek
out emerging technologies that offer
significant potential to disrupt existing
markets and enable new business
opportunities. Those that connect across
different disciplines create particularly
attractive opportunities.
We will work with businesses and
government partners on an integrated
strategy to promote the rapid
commercialisation of emerging technologies
and industries. This will embrace the national
Emerging Industries Working Group which
we will establish and lead.
Key technology areas
We will invest in specific key
technology areas:
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and electrical systems
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technology (ICT).
We will be clearer about the long-term
timing of these investments.
We will invest with partners to promote
the rapid commercialisation of
emerging technologies and industries
What this means for business
Input from a range of partners has helped
us to identify a number of priorities across
the key technology areas. In taking forward
these priorities we will:
• Develop, publish and implement
strategies, and technology roadmaps
that justify and prioritise our
interventions, and run collaborative R&D
competitions focused on these priorities
• Invest in materials technologies,
particularly in areas which address
the challenges of energy and the
environment, promote a ‘reduce, re-use
and recycle’ focus on sustainability, or
have healthcare applications
• Review the network of Micro and
Nanotechnology Centres to identify
areas of real strength and determine
how best to further exploit these to the
benefit of UK business
Technology-inspired innovation
Commitments

We will continue to invest in
networks and knowledge exchange.
Our investment in this area will be
approximately 25 percent of our
overall budget.

double the number of Knowledge
Transfer Partnerships and introduce
more flexible and short-term
partnerships, increasing our annual
investment to £35 million

activities both in the UK and
internationally, primarily


will invest in research to inform our
thinking and to help businesses to
understand the latest developments

understand the factors which make
an innovative culture and where our
interventions can make a difference

of public engagement activities
including communicating and
celebrating innovation success
stories

leadership.

Innovation is something that people
choose to do. To accelerate innovation
in the UK, it is essential to build
confidence and raise aspirations. We
need a culture that enables, celebrates
and ultimately rewards talent and
innovation – and that retains and
attracts talented people. The market for
talent is global. We have to compete in
that market.

Strategy Board is therefore to catalyse
and connect with our partners, fostering
between us a national confidence in the
power of innovation. Through our work
and by working with other organisations



want to excite people about technology
and innovation and provide insight and
expertise to the wider community.
Knowledge exchange
When people with different perspectives
share what they know, it enriches
them, sparks new ideas and delivers
surprising benefits. We want to inspire
and enable people to play their part in
the innovation economy.
We will:

• Complete the process of doubling
numbers of Knowledge Transfer
Partnerships by Spring 2011, including
an increase in those involving further
education providers
• Roll out exible ‘mini-KTPs’ in conjunction
with the regional development agencies,
devolved administrations and the
research councils
• Engage a wider range of co-funders,
including research charities
• Pilot other ways to increase the scope
of Knowledge Transfer Partnerships,
including international partnerships
• Investigate other people-related
knowledge exchange mechanisms
such as mentors, business-to-business
exchanges, entrepreneurs-in-residence
and fellowships
• Work with research councils and
knowledge transfer groups to enhance
the openness of research to business.
10
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The innovation climate
The innovation climate
A strategy for business innovation
|
2008-2011
The innovation climate

|
11
Networks
Networks are a central component of an
effective innovation culture. Knowledge
Transfer Networks fulfil a variety of
vital functions and set the tone. They
connect broader business and academic
communities, with the overall objective of
accelerating technology transfer into
UK business.
They drive the flow of people, knowledge
and experience between business and
the knowledge base, between businesses
and across sectors, between supply
and demand sides of markets, and
between experienced and inexperienced
innovators.
They also provide an expert forum for
a coherent business voice in particular
technology areas, acting as the eyes and
ears of the Technology Strategy Board
and advising on technology needs or on
issues which enhance or inhibit innovation
in the UK.
We will:
• Review our investment in networks,
including Knowledge Transfer Networks,
to ensure they support our strategic
priorities

• Increase the international outlook of the
Knowledge Transfer Networks
• Work at joining up effective local,
regional and national networks, as well
as linking to international networks
• Work at a regional level with clusters,
science parks and science cities.
Hareesh Kallambella, working at Jones Stroud Insulations in a Knowledge Transfer Partnership with the
University of Central Lancashire, to optimise manufacturing processes and introduce new product
development projects.
Clusters
Clusters of innovative activities in cities
or regions can be highly productive.
Proximity between businesses, and with
universities or other institutions, can
generate mutually reinforcing relationships
– whether supplier, customer, competitor,
collaborator or all at once.
Clusters also create local labour markets
for highly skilled people. Businesses
involved gain brand value and
enhance their reputations as innovative
organisations.
We welcome the attention paid to
cluster development by our partners
in the regional development agencies
and the devolved administrations. We
will engage with regional development
agencies, devolved administrations,
universities and other partners to invest

in existing and emerging clusters, where
research and business technology
strengths are concentrated.
A strategy for business innovation
|
2008-2011
12
|
Thinking and acting globally
We want to help UK companies succeed
globally. To do this, we and they need an
international outlook and an understanding
of worldwide trends and technical
developments, international partnerships
and value chains.
In the international arena, we will:
• Strengthen support to generate greater
UK business involvement in the EU
Framework Programme and other
European Union activities such as
EUREKA, Eurostars, Joint Technology
Initiatives and ERA-NETs, where there is
benefit for UK business
• Look at new ways of internationalising
UK innovation, for example, collaborative
projects involving businesses,
governments and researchers from
more than one country
• Foster collaboration and support the
Knowledge Transfer Networks to link

with international networks giving UK
business knowledge of leading edge
global developments
• Working with our partners, enhance
UK influence in European innovation
programmes to encourage their funding
priorities to reflect UK strengths
and needs
• Work with others to enhance
international understanding of the UK’s
innovative capacity and potential, and to
promote the UK as a global innovation
centre of excellence - with internationally-
focused partners such as UK Trade
and Investment, RCUK International,
the British Council, and British
embassies including the Science
and Innovation Network
• Benchmark the performance of the
UK against other countries and also
benchmark the Technology Strategy
Board against other similar organisations
globally, to assess performance and
to share best practice
• In the near term, concentrate particularly
on interactions with the European Union,
the US and other established and
emerging economies which we identify
as areas of focus.
Thinking and acting globally

Sue Riddlestone, Managing Director of BioRegional
MiniMills (UK) Ltd, demonstrates paper made from
straw. This collaborative research and development
project is developing small scale technology for
treating black liquor, the effluent produced during
paper making. With applications in many countries
around the world, this will enable agricultural residues
such as straw to be made into paper locally, putting
waste to good use and relieving pressure on the
world’s forests.
Photo by Paul Heyes
Connecting innovation
|
13
The technology and innovation landscape
in the UK is fragmented. According to Lord
Sainsbury’s 2007 report, The Race to the
Top, “industry is faced with a bewildering
array of organisations and schemes, many
of which cover the same ground.”
The government’s Business Support
Simplification Programme is already
beginning to address this complexity.
From our perspective, a joined-up
approach to innovation is vital for the UK’s
future competitiveness.
Connecting innovation
The landscape is complex;
there are many paths to innovation.
Business requires greater clarity and

a more connected approach
The Technology Strategy Board is helping businesses
like the Morgan Motor Company to use different
elements of innovation support to meet their needs.
Matthew Humphries is one of several graduates
working to enable rapid development of new vehicle
designs, in a Knowledge Transfer Partnership with
Birmingham City University. He helped to develop the
Morgan LifeCar, a fuel cell hybrid sports car through a
collaborative research and development project led by
Morgan with Technology Strategy Board investment.
The partnership won a Lord Stafford Award in 2007,
Matthew was recognised as a ‘business leader of
tomorrow’ at the 2008 KTP awards, and the car made
its debut at the Geneva Motor Show in March 2008.
Businesses need coherent support from
government. To this end, we will create
a UK innovation map to help them to
access the most relevant support quickly.
It will also act as a catalyst to encourage
innovative thinking.
The UK innovation map will help business
access the right support at the right time
and provide a continuum to move ideas
much more quickly from early concept
to the market. As part of the innovation
map, the Technology Strategy Board will
work with other organisations providing
technology and innovation support,
to bring together the different types of

support available. A longer-term aim will
be to ensure greater consistency in rules
and application processes.
We work in all sectors of business, and
with organisations ranging from the largest
to the smallest which are distinguished by
a commitment to innovation and growth.
We will use a variety of mechanisms to
help business. This will allow us to tailor
our service to their needs.
We will:
• Provide more coherent support
for business
• Give the most relevant support using
a menu of investment mechanisms
• Increase exibility with different
combinations of products
• Rene and enhance the investment
mechanisms we use
• Balance our portfolio with some
high-risk, high-return investments
• Connect with partners to provide a range
of support from initial concept through to
market launch.
The rest of this section outlines the
mechanisms by which we can invest in
business success.

Knowledge Transfer Networks are national
networks which aim to improve the UK’s

innovation performance by increasing
the breadth and depth of knowledge
exchange between companies and
between business and academia.
There are 24, including a new network for
creative industries due to be launched
in 2008.
Knowledge Transfer Partnerships
Knowledge Transfer Partnerships, led
by the Technology Strategy Board with
seventeen other public bodies, enable
firms to take advantage of the wealth of
scientific, engineering management and
technological expertise available in the
‘knowledge base’. In a Partnership, a
recently qualified person (an ‘Associate’)
joins a company working with staff
to embed the knowledge the company
is seeking.
The scheme has been operating for
over 30 years and during that time has
remained largely unchanged. We believe
that to meet a greater range of needs
it has to evolve. For example we will
introduce shorter placements and look
at the potential of other models such as
one or more associates working with
several businesses in a specific area. We
will also look at the possibility of placing
people from business in a research

institution, increasing partnerships in the
further education sector and establishing
international partnerships.
Sandpits
A sandpit is a week-long workshop which
brings together a range of organisations
and experts to develop and articulate
problems where the solution seems initially
complex or ill-defined. Sandpits are based
on a model used by the research councils.
Feasibility Studies
Feasibility studies are a way for companies
to carry out exploratory studies which
could lead to the development of new
products, processes, models, experiences
or services. The study could involve
for instance investigating the technical
feasibility of a new idea.
We work in all sectors of business,
and with organisations ranging from
the largest to the smallest which are
distinguished by a commitment to
innovation and growth
14
|
How we will make investments
How we will make investments
A strategy for business innovation
|
2008-2011

How we will make investments
|
15
Exploratory awards
Small, early investments can stimulate
innovation. For many businesses, this
initial funding is the difference between an
idea taking off or going nowhere. We plan
to provide funding for exploratory awards
to stimulate activity such as the formation
of initial relationships between SMEs and
universities. Initially, we will work with the
Knowledge Transfer Networks to deliver
this type of investment.
Proof of concept
Early-stage and near-market proof of
concept projects are part of the support
needed to make an idea investor-ready
and are often important for raising venture
capital. As part of our toolkit, we will work
with DIUS and the RDAs in establishing a
more co-ordinated approach to the proof
of concept support available.
Collaborative Research
and Development
The Collaborative Research and
Development mechanism supports
innovative proposals in which the business
and research communities work together
on projects to deliver new products and

services. Projects must involve two or
more collaborators, at least one of which
is from a business. The level of grant
support varies between 25 percent for
projects nearer to market and 75 percent
for those more concerned with looking at
the commercial potential of ideas coming
from the knowledge base.
Large projects and demonstrators
We plan to continue investment in large
validation projects and demonstrators
seeking public funding greater than £5
million. These projects must address
our strategic priorities and promise a
significant impact.
Centres
A network of 23 micro and
nanotechnology centres around the
UK was established by government to
create a recognised and sustainable
infrastructure of centres of strength in this
area, for the benefit of UK business. We
will review these centres to identify areas
of greatest value and determine how best
to exploit them for business benefit.
Innovation and knowledge centres
are centres of excellence designed
to accelerate and promote business
exploitation of an emerging research
and technology field. They offer a

shared space and entrepreneurial
environment in which researchers,
potential customers and professionals
from academia and business can work
side-by-side to scope applications,
business models and routes to market.
We are investing in two such centres,
in association with the Engineering and
Physical Sciences Research Council
and the Biotechnology and Biological
Sciences Research Council, and will
consider further opportunities.
Standards, regulation
and measurement
Standards, regulation and measurement
are important drivers for innovation.
Standardisation and metrology facilitate
the pull through of products, services and
processes into the market. Standards – as
with the Code for Sustainable Homes – can
also be used to set longer term targets.
Regulation can be seen as an innovation
inhibitor, but used effectively it can in
fact act as a driver and a source of new
business opportunities. We can encourage
regulators to think more about innovation
and help businesses to take advantage of
opportunities arising from new regulations.
Across all our activities, we will work with
a range of organisations to look at how

standards, regulation and metrology
can stimulate innovation and provide
competitive advantage to UK business.
We will:
• Work with the BSI British Standards to
pilot standards activity in areas where we
can provide the UK with a competitive
advantage
• Work with the National Measurement
System including institutes such as the
National Physical Laboratory to ensure
UK business is taking best advantage of
the effective use of measurement
• Examine the potential innovation
opportunities arising from the
implementation of EU regulations.
Geomerics Ltd is leading a consortium in a
Collaborative Research and Development project to
bring about a step change in the quality of graphics
for computer games. The new technology, called
Enlighten, can create realistic illumination effects in real
time, in dynamic lighting environments within a game.
A consortium led by Stratophase and co-funded
by the Technology Strategy Board is developing
bio-chemical sensor chips; disposable, highly-
sensitive microchips which enable detection of
harmful biological pathogens such as anthrax or
E.Coli. Applications of the technology include both
medical diagnosis and security, for example to
detect biological attack.The picture shows part of the

production process, using an ultra-precise laser to
‘write’ an optical circuit onto a blank chip.

our customer irrespective of size,
maturity, sector or national ownership
We occupy the space between business,
government and the research community.
Our main focus and the main reason for
our existence is to support UK business
in the area of innovation enabled by
technology. This is our purpose. We see
businesses as our customers.
We want to provide leadership in
technology and innovation, both in the
UK and internationally. Through our own
staff, the expertise that resides in our
Knowledge Transfer Networks and by
bringing together experts from many
disciplines and business sectors, we
will lead the debate and address key
questions of relevance to UK business
and government.
Working with business
The Technology Strategy Board has an
enabling role in supporting UK business,
as a champion, influencer and investor.
Our primary focus is providing UK based
business, irrespective of size, maturity,
sector or ‘national’ ownership, with the
technology and innovation insights and

support required to make a difference. We
support business by:
• Providing guidance, expert knowledge
and opportunities
• Providing funding to invest jointly in
research and innovation
• Working with business to overcome
barriers to innovation.
UK business currently invests far more
in research and development than we
have at our disposal. In 2007 alone, the
total was more than £16 billion. We will
work with business in areas that we both
consider important and jointly leverage
our investment and skills to maximise
the benefit.
We will:
• Provide business with a clear view
of the support that is available from
us, from others in the UK and
internationally, and work to ensure
that it is a coherent offering
• Be relentless in simplifying the support
we provide and ensure that it is efficient,
effective and meets the needs of
individual businesses
• Bring people together to generate new
ideas, transfer knowledge and create
new relationships
• Work with the UK Intellectual Property

Office to provide advice to businesses,
helping them to capitalise on the
benefits of innovation
• Help businesses to see new
opportunities with a longer-term
view of technology and innovation.
Working also with other potential providers
of funding such as venture capitalists
and business angels, we will build on the
strengths of UK business and provide
the opportunities for business to be
at the forefront of technology and
innovation globally.
Working with the knowledge base
Universities, further education providers,
research and technology organisations,
and other research providers are an
integral part of many of our activities to
foster innovation. Bringing them together
with business in collaboration stimulates
new ideas and generates an exchange
of knowledge which can help drive future
business and economic growth. The UK
has a world-leading knowledge base in
many areas and we need to ensure we
capitalise and build on that expertise.
Working with government
We will only be able to achieve our
objectives by working in partnership with
government bodies. We work closely

with three distinct groups of government
partners – government departments and
their agencies, devolved administrations
and regional development agencies, and
the research councils. We view these
organisations as our partners.
We will work together, leveraging our skills
and jointly supporting activities, and we
will use our leadership role for working
across government and co-ordinating
technology and innovation activity.
16
|
Our customers and partners
Our customers and partners
Government departments
We will work closely with departments right
across government, particularly in the area
of societal challenges.
This means understanding governmental
policies and how we can work with them
to good effect. It means helping to ensure
that public procurement acts as a stimulus
to innovation and that longer-term goals
are set which provide business with the
confidence to invest. It involves working
closely with the chief scientific advisors.
It means using standards, measurement
and regulations to stimulate innovation and
working with bodies such as the BSI British

Standards, National Physical Laboratory
and the UK Intellectual Property Office to
make this effective.
Finally, it means advising government
where there are barriers to UK business
innovation and feeding back what we learn
to improve future thinking.
Our customers and partners
|
17
A strategy for business innovation
|
2008-2011
Devolved administrations and
regional development agencies
The Technology Strategy Board has
a UK-wide role and will work with the
devolved administrations of Scotland,
Wales and Northern Ireland and the
English regional development agencies
to understand how their strategies and
activities align with our national strategy,
and to support activities which address
national and regional priorities.
We will:
• Identify and follow through on priority
areas where the Technology Strategy
Board and the devolved administrations
and regional development agencies will
work together

• Use the recently established Strategic
Advisory Group to provide advice on
how regional support should be aligned.
Lord Sainsbury’s review ‘The Race to
the Top’ recommended that the regional
development agencies should invest
£180 million over the next three years in
activities aligned with the Technology
Strategy Board. We will aim to exceed this
figure, focusing on shared priorities.
Research councils
The research councils are the main
public investors in fundamental research
in the UK. We will work with them to
understand the capabilities and outputs
of the UK universities and to support
areas of research that show commercial
promise. We will do this by strengthening
business engagement with the research
base, by maximising the potential for
commercialising basic research and
accelerating the process of doing so.
The broader remit of the Technology
Strategy Board will make it easier to
work with those research councils where
perhaps there has not been any significant
previous activity.
We will work with research councils on
areas we both consider a priority. Over the
next three years, the research councils will

commit at least £120 million in support of
Technology Strategy Board activities.
We will also work with the research
councils on their strategic cross-council
research programmes, enhancing links
between areas and links with other
partners such as regional development
agencies and devolved administrations.
These programmes include energy,
living with environmental change, global
security, ageing, nanoscience and the
digital economy.
The Assisted Living Innovation Platform, launched in November 2007, brings together The Department of Health,
the Engineering and Physical Sciences Research Council and the Economic and Social Research Council. It will
develop innovative technology-enabled products and services to meet the increasing demand for independent
living from the growing numbers of elderly people, who may suffer from chronic conditions.
UK innovation trends
The UK has one of the most innovative
economies in the world, according to the
2007 European Innovation Scoreboard.
This places the UK among Europe’s
leading nations for innovation (along with
Denmark, Finland, Germany and Sweden)
and ahead of the USA. Indeed, the 2007
UK Innovation Survey indicates that the
majority of UK firms (64 percent) surveyed
had actively engaged in innovation in the
previous three years.
Innovation is not, however, easy to
measure. There are many other indicators,

such as R&D spending, and they are only
part of the picture.
That means that the trends in innovation
are hard to spot. For example, the 2007
UK survey showed only a marginal
increase in reported innovation compared
with the 2005 survey. But other indicators,
such as trends in the commercialisation
of university research, paint a much more
positive picture.
It is vital to know what the trends in
innovation really are. A new Innovation
Research Centre will be established by
DIUS, NESTA, ESRC and the Technology
Strategy Board to ensure a steady supply
of high quality innovation research into
the UK innovation policy community. And
we will contribute to a range of initiatives
including the Annual Innovation Review, to
be published by DIUS for the first time in
autumn 2008, and the Innovation Index, a
pilot version of which is to be published by
NESTA in 2009.

We also need to measure the Technology
Strategy Board’s contribution to raising
the innovation performance of the UK.
As a publicly funded organisation, we will
evaluate all of our activities, to assess both
their impact and their value for money.

The very nature of innovation presents
some challenges. First, it takes time for
innovation to bear fruit in the market.
Second, many of the benefits ultimately
accrue to other companies or even other
sectors. Because of these lags and
diffusion effects, separating out our own
impact from that of other drivers is bound
to be difficult.
To address these challenges and
begin measuring our impact, we will
draw on the experience of other public
sector organisations, including similar
organisations around the world, as well as
business exemplars, to establish a best-
practice appraisal and evaluation regime
for all our own activities.
We will extend into other areas the good
measurement practice already seen
in Knowledge Transfer Partnerships in
capturing the real business benefits of the
investments made.

18
|
Measuring success
Measuring success
A strategy for business innovation
|
2008-2011

This is a journey of partnership
to put innovation at the heart of
business life in the UK
In conclusion
|
19
Innovation and the application of
technology are vital to boost the
UK’s economy, address social and
environmental challenges and help
commerce to thrive. To achieve these
ambitions, businesses need inspiration
and investment. They need access to
breakthrough thinking. They need to
join forces with experts and business
partners. And they need to operate in an
environment that is open to new ideas and
which supports them.
This is the mission of the Technology
Strategy Board over the coming years.
We will connect and catalyse to address
these needs, concentrating on three
main priorities:
• Challenge-led innovation, finding
opportunities for innovative solutions
in current and future societal and
economic challenges
• Technology-inspired innovation,
maintaining the UK’s expertise in
technologies where it leads, and

investing in the next generation of
technologies and industries, and
• The innovation climate – fostering
confidence in the power of innovation
to create sustainable economic growth
and a climate in which this can happen
through knowledge sharing, networking
and celebrating success.
The DIUS white paper ‘Innovation Nation,’
published in March 2008, highlighted the
core role the Technology Strategy Board
will play in driving innovation in the UK. In
this strategic plan we have outlined how
funding of £1bn for the years 2008-11
(with partner contributions), together
with matching funds from business, will
provide a total investment of at least
£2 billion in innovation over the next
three years.
Working with our partners, we will have
many tools at our disposal to help make
connections happen, invest in research
and drive innovation. This is the start of a
journey of partnership which we hope will
put innovation at the heart of business life
in the UK. We believe that this is an urgent
and vital task.
In conclusion
We are ready. Let’s go.
Glossary

20
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Glossary
BERR The Department for Business,
Enterprise and Regulatory Reform;
the government department primarily
responsible for business in the UK.
BSI The BSI Group includes BSI British
Standards, which as the national standards
body of the UK develops and sells standards
and standardisation solutions to meet the
needs of business and society.
Collaborative Research & Development
A Technology Strategy Board programme
which invests in innovative research and
development projects. Competitions are
held inviting proposals from business-led
consortia, often including knowledge base
partners. Formerly part of the DTI’s
Technology Programme.
DIUS The Department for Innovation,
Universities and Skills. The government
department which sponsors the Technology
Strategy Board.

The devolved governments in Northern
Ireland, Scotland and Wales.
Energy Technologies Institute (ETI)
A public/private partnership organisation
established in 2007 to develop secure

sustainable and affordable energy supplies
for present and future generations. The
Technology Strategy Board is a funding
partner of the Energy Technologies Institute.
EU Framework Programme
The Framework Programme for Research
and Technological Development, the EU’s
main instrument for funding research in
Europe. The Seventh such programme is
currently in progress; known in short as FP7,
it will run from 2007 to 2013.
Eurostars A programme launched
in October 2007 by EUREKA. Eurostars
provides public/private funding for research
by high-tech small and
medium-sized enterprises (SMEs) in Europe.
The programme issued its first
call in February 2008.
 A pan-European network for
market-oriented, industrial R&D, created
as an intergovernmental initiative in 1985.
EUREKA aims to enhance European
competitiveness through its support
to businesses, research centres and
universities who carry out pan-European
projects to develop innovative products,
processes and services.
 The European Research Area
(ERA), is a concept in which different
national funding agencies work to create a

joint approach to funding and to promote
free movement of researchers and ideas
across the continent. European Research
Area Networks (ERA-NETS) have been set
up in specific areas of research, to help
co-ordinate national research policies and
activities in terms of objectives, expertise
and resources, with funding from the
European Commission.
Innovation Platform An approach to
innovation which addresses a major policy
or societal challenge by working with
business and research organisations to
identify their response to the issue and the
market opportunity, understanding the role
of government regulation and procurement,
and supporting programmes to deliver
innovative solutions.
Key application areas A framework
of broad areas of enterprise which the
Technology Strategy Board has identified
as key fields where the application of
innovation and technology can address
societal or competitiveness challenges.
Key technology areas A framework of
core technologies in which the UK leads or
which are critical to its success, designed
to focus and prioritise Technology Strategy
Board investments.


National networks, funded primarily by the
Technology Strategy Board, which aim to
improve the UK’s innovation performance
by increasing the breadth and depth of
knowledge exchange between companies
and between business and academia in
specific areas of technology.
Knowledge Transfer Partnership (KTP)
A UK-wide programme, funded by the
Technology Strategy Board and 17 public
sector partners, in which high-calibre,
recently qualified people from the
research base work within a business
on innovation projects.

A Technology Strategy Board service
providing information and advice to help
UK business participate in the latest
European Framework Research and
Development Programme.
 The National Endowment for
Science, Technology and the Arts, a
non-departmental public body devoted to
supporting talent, innovation and creativity
in the UK.
Research councils The seven primary
government-funded basic research
organisations in the UK. Comprised of
the Engineering and Physical Sciences
Research Council, the Economic and

Social Research Council, the Scientific and
Technical Facilities Research Council, the
Natural Environment Research Council, the
Arts and Humanities Research Council,
the Biotechnology and Biological Sciences
Research Council and the Medical
Research Council.
Regional development agencies
Government funded bodies based in
the regions of England which co-ordinate
regional economic development
and regeneration.
RCUK Research councils UK, a strategic
partnership of the seven research councils.
Sainsbury Review A review of
government’s science and innovation policy
by Lord Sainsbury, entitled The Race to the
Top and published in October 2007.
Small Business Research Initiative
(SBRI) A government procurement
programme designed to make it easier
for smaller firms to obtain procurement
contracts from government bodies to
conduct research and development.
UK Trade & Investment (UKTI)
The government organisation which
works to enhance the competitiveness of
companies in the UK through overseas
trade and investments and attract a
continuing high level of quality foreign

direct investment.
A strategy for business innovation
|
2008-2011
Technology Strategy Board
B1, North Star House
North Star Avenue
Swindon
SN2 1JF
Tel: 01793 442700
Email:
www.innovateuk.org
About the Technology
Strategy Board
The Technology Strategy Board is an
executive non-departmental public
body sponsored by the Department for
Innovation, Universities and Skills.
It is made up of a team of executive
directors and staff who develop strategy
and tactics, provide management
and deliver the organisation’s work
programmes, while a Governing Board
sets the overall direction.
The current members of the Governing
Board are:
Dr Graham Spittle (Chairman)
VP Software, UK, Ireland and
South Africa, IBM


Director, Research, Development and
Innovation, Akzo Nobel

Board member, South West RDA
Dr John Brown
Chairman, BTG plc
Dr Joseph Feczko
Chief Medical Of cer, P zer

Chief Executive,
Amadeus Capital Partners Ltd
Dr David Grant CBE
Vice Chancellor, Cardiff University
Jonathan Kestenbaum
Chief Executive, NESTA
Professor Julia King CBE
Vice Chancellor, Aston University

Head of Global Strategy, Standard
Life Investments
Dr Peter Ringrose
Chair, BBSRC
Dr Jeremy Watson
Director of Global Research,
Ove Arup & Partners
Iain Gray (Chief Executive)
Technology Strategy Board
B1, North Star House
North Star Avenue
Swindon

SN2 1JF
Tel: 01793 442700
Email:
www.innovateuk.org
© Crown Copyright 2008 T08/004
Printed on Evolution 75% recycled paper